Setting up a company in Andorra is one of the requirements for receiving active residence as a self-employed person. In other words, if you are an entrepreneur, youtuber, broker, freelance or any other economic activity and you wish to establish yourself in the principality, you will need to know the ins and outs of setting up a company in Andorra.
✅ If you would like to find an up-to-date, practical and detailed guide, written by our tax experts who provide answers every day to people who find themselves in the same situation as you, don’t miss this article. Also, remember that we can offer you the fastest service for transferring your residence to Andorra and opening a company in the Principality.
1. What are the steps for setting up a company?
1. Application for an Administrative Identification Number (NIA)
To carry out any formalities that require subsequent registration in the register of companies, it is necessary to have an AIN. Did you know that the only option available to you is not to create a company, but that you can also buy an existing company. First, let’s take a look at the two types of companies covered by the Andorran legal system:
A) Limited Company
- Minimum capital: €3,000
- There is no limit or minimum number of partners, in the case of a single partner: “Sociedad Limitada Unipersonal.”
B) Public Anonimus Company
- Minimum capital: €60,000
- There is no limit or minimum number of partners, in the case of a single partner: “Sociedad Anónima Unipersonal”.
The requirements are similar to the Spanish model, with one variation: the foreign investment application requirement must be approved by the government in order for the creation to go ahead.
2. Apply for a company name
Three different names must be established in order of preference. The Companies Department is in charge of verifying the names requested, analysing whether they meet the requirements established by law and comparing them with the existing names.
The Registrar of Companies issues a decision on the accepted name within 10 days. This decision is valid for six months. Once the name has been accepted (in the case of a foreign company), an application for authorisation must be made to the Foreign Investment Department.
In addition, any foreign shareholder holding more than 10% of the share capital must apply for foreign investment authorisation. The department in charge issues a decision approving or denying the investment within a maximum of 30 working days. This decision is valid for six months.
3. Pre-opening of bank account
The next step is to make a pre-opening in a bank in the country to make the disbursement of the capital of the company. The bank will ask for all of the above documents along with additional documentation such as criminal records, source of funds, tax returns in the country of residence, etc.
The bank issues a bank disbursement certificate within two weeks.
4. Notary
With all of the above original documentation, you must go to an Andorran notary to formalise the Deed of Incorporation. In addition to the above documents, the company statutes adapted to Law 20/2007, of 18 October, on public limited companies and limited liability companies, must be submitted.
The notary has 15 working days to send the original copy of the deed together with the annexes to the register of companies, and the register of companies has a further 15 days for the actual registration.
5. Other
Apply for a Tax Registration Number (NRT) and register with the Andorran Social Security Fund (CASS).
2. Advantages of setting up a company in Andorra
Firstly, the country’s attractive taxation and the legal security it offers, with various international agreements and memberships such as the UN and the IMF. It is a particularly attractive country for digital nomads, as it has the highest fibre optic connectivity in the world.
It is also less than 3 hours by car from major cities such as Barcelona and Toulouse, with which it is currently connected by road and has daily bus services. The construction of a national airport and railway connections are also being studied, which shows the clear intention of the Andorran government to improve its position and connection with the rest of the world.
On the other hand, Andorra is increasingly committed to working on diplomatic relations with other countries, especially in the tax sphere. For this reason, there are currently 8 Double Taxation Avoidance Agreements (DTA) in force with countries such as Spain, France, Portugal, Malta and Cyprus. Other agreements with new countries are also being studied and will enter into force soon.
Finally, the Andorran administration is clearly committed to foreign investment and attracting new residents with medium-high purchasing power. This is why it is making it easier for these citizens to come to the Principality, especially from a European country.
In short, Andorra is a free and safe country, with top quality public services and a clear commitment to new companies and entrepreneurs. As a result, the whole climate is conducive to the continuous arrival of new residents.
3. Requirements for setting up a company in Andorra
The minimum capital required to set up a company is €3,000. In the case of a limited liability company, or 60,000 euros in the case of a public limited company. There is no minimum number of partners, although to create a company at least one person (administrator or employee) must live in Andorra. In the case of a sole shareholder, it would be a single-member limited liability company, or a single-member public limited liability company (but there is no minimum or maximum).
Depending on whether you choose to work from home, work from a coworking space or set up your own physical office, you should calculate annual fees of between €600 and €1000, depending on your parish of residence, employees, and the size of your company.
4. How much does it cost to set up a company in Andorra?
Setting up a company costs around 5,000 euros (counting the 3,000 euros of capital, 1016.67 euros of company tax and around 600 euros of notary fees). This is a fixed price, although extra costs can also be added (and recommended), such as the help of a law firm to advise you throughout the process.
5. What do you need to know before setting up a company in Andorra?
Renting premises in Andorra is around €700 minimum in the capital, to which municipal taxes must be added. If you choose to work in a coworking space, there are several options of central, modern, networking buildings where you can find rates from €200 per person. The minimum wage in Andorra is currently
€1,050 and the average wage is €2,011. In addition, the social security contribution rate is much lower than in other countries, being only 15.5% for the company and 6.5% for the employee. This is one of the reasons why the unemployment rate is below 4%.
5. FAQs about setting up a company in Andorra:
At what level of annual income is it worth moving to Andorra?
The decision to move to Andorra is a personal one and will probably be linked to other factors, such as family relationships, a taste for nature or winter sports. The decision is therefore highly subjective, but it could be considered worthwhile to move to Andorra as a freelance or remote worker with an annual income of more than €24,000.
Since in Andorra no income tax is paid on the first €24,000, the entire income would go to the worker. On the other hand, in Spain, deducting income tax, the annual income would be €19,000. On an average salary, just by moving to Andorra, you would save more than €400 per month. In addition, you should know that in Andorra services such as education are free and health care has a co-payment system of 25% of the services, which makes access to them completely accessible to everyone.
Can I take my current employees with me?
Since there is no concept of business regrouping, each worker will decide freely, depending on his or her personal circumstances, whether to transfer his or her residence to Andorra. In the event that he/she rejects this option, the worker will be taxed in his/her country of habitual residence.
If I set up a company in Andorra, do all the partners have to live in the country?
It is not necessary for all the partners to be in Andorra, but at least one must be. However, partners who do not transfer their tax residence to Andorra, either by active or passive residence, will not be able to pay tax in the Principality and, therefore, will not be able to take advantage of its taxation and low taxes.
How long can it take from the start of the formalities to the start of the business?
Normally, if you come from a European Union country, the time it takes to incorporate a company is around 3 months (a little longer if you take periods such as summer holidays or the end of the year, when notaries’ offices are less available).
Remember that with Andorra One we reduce the time taken to transfer residence and set up a company, committing ourselves to offer you the complete service in less than 2 months.
6. What services does Andorra One offer in the creation of companies?
ANDORRA ONE OFFERS THE FASTEST SERVICE ON THE MARKET FOR THE TRANSFER OF RESIDENCE AND THE CREATION OF COMPANIES
✅ Assessment meeting to determine whether in your specific case it is appropriate to set up a company in Andorra.
✅ Carrying out all the formalities for incorporating or buying companies
✅ Advice throughout the process
✅ Day-to-day management of the company’s accounts once the company is up and running
✅ Referral to trusted managers, accountants and estate agents for a smooth and carefree arrival of new residents and their
